Italy could be next country to LEAVE EU after populist parties gain POWER

ITALY may be the next nation to exit the EU after the Five Star Movement and far-right League formed a government, marking the first time that one of Europe’s founding members will be led by populist and Eurosceptic parties.

Luigi Di Maio and Matteo Salvini have called for an end to austerity and increased tax cuts

The Five Star Movement’s leader Luigi di Maio and League’s leader Matteo Salvini published joint policy proposals, calling for an end to austerity, increased tax cuts, a guaranteed basic income for the poor and increased deportation of migrants.

The parties reject EU austerity measures and are aiming to increase public spending and renegotiate the country’s debt, which is currently the second largest in the EU behind Greece.

The new government announced: “We will target a programme of public debt reduction.

“Not through revenue based on taxes and austerity - policies that have not achieved their goal - but through increased GDP by reviving demand.”

The two leaders have stopped short of calling for Italy to immediately leave the euro

We’ve finally concluded the Contract for the Government of Change. I’m very happy

Luigi Di Maio

The new government has also called on the EU to alter its spending caps, which currently limits member states’ budget deficits to three per cent of GDP.

However Italy’s growing demands threaten to cause tensions in the EU and they run the risk of creating growing divides between them and their allies.

EU investment commissioner Jyrki Katainen warned Italy, stating: “I haven’t heard any signals that members or the Commission would like exceptions for any states.”

Mr Di Maio and Mr Salvini have nevertheless stopped short of calling for Italy to immediately leave the euro, but the coalition plans on deporting around 500,000 illegal immigrants.

The agreement between the two leaders ends months of political uncertainty in Italy, which was sparked by the country’s general election in March.

Commenting on the negotiations, Mr Di Maio said: “We’ve finally concluded the Contract for the Government of Change. I’m very happy.”

If coalition negotiations had failed, both Mr Di Maio and Mr Salvini had previously called for fresh snap elections to take place, which would have offered Italy’s controversial former Prime Minister Silvio Berlusconi another chance of re-entering government.

In a break with Italian centrist policies and the political parties which have dominated the country’s political landscape since the early 1990s, over 50 per cent of voters backed the Five Star Movement (M5S) and the far-right League in the March election.